CELANESE CORPORATION DATED DECEMBER 11, 2008 DAVID N. WEIDMAN You have been awarded Performance Units with the restrictions, terms and conditions described in this agreement: Performance Unit Target Award 200,000 Units This grant is made pursuant to...
EXHIBIT 10.2
CELANESE
CORPORATION
DATED
DECEMBER 11, 2008
XXXXX
X. XXXXXXX
You have
been awarded Performance Units with the restrictions,
terms and
conditions described in this agreement:
Performance
Unit Target Award
200,000
Units
This
grant is made pursuant to the Performance Unit Award Agreement dated as
of December 11, 2008 between Celanese and you, which Agreement is
attached hereto and made a part hereof.
Page 1 of
6
CELANESE
CORPORATION
This Performance Unit Award Agreement
(hereinafter called the “Agreement”) is made and entered into effective as of
December 11, 2008 (the “Grant Date”) by and between Celanese Corporation, a
Delaware corporation (“Celanese” or the “Company”) and Xxxxx X. Xxxxxxx (the
“Participant”), when fully executed thereby in accordance with this
Agreement. Capitalized terms shall have the same meaning ascribed to
them in this Agreement.
1. Performance
Unit Award: In order to encourage Participant’s contribution
to the successful performance of the Company, Celanese hereby grants to
Participant as of the Grant Date, pursuant to the terms of this Agreement,
performance-vesting units (the “Performance Units” or “Award”) representing the
right to receive, at Target performance levels, the cash value of
200,000 shares of the Company’s Series A Common Stock (“Common
Stock”). The number of units that may vest and become payable as cash
under this Award is set forth in Appendix A. Participant hereby
acknowledges and accepts such Award upon such terms and subject to such
performance requirements and other conditions, restrictions and limitations
contained in this Agreement.
2. Performance-Based
Vesting: The number of Performance Units that may vest and be
payable as cash based on Company performance shall be determined using the
methodology set forth in Appendix A and Appendix B, and shall be subject to the
following provisions.
(a) Service Period: The Service
Period shall be the period commencing on December 11, 2008 and ending on October
14, 2011.
(b) Performance
Measures: Performance vesting shall be based on achievement
against pre-determined targets for i) Operating EBITDA and ii) Relative Total
Shareholder Return (“Relative TSR”). These measures are described in,
and will be determined in accordance with, Appendix A.
(c) Performance
Targets: Threshold, Target and Stretch performance levels for
each performance measure for the performance period are described in Appendix
A.
(d) Performance
Vesting: The aggregate number of performance units that may
actually vest shall be determined by reference to the target number of
Performance Units granted pursuant to the Award as adjusted for the Company’s
level of performance with respect to each performance measure as set forth in
Appendix A.
(e) Vesting Date: The date upon
which any performance units that may vest pursuant to this Award shall be
October 14, 2011 (the “Vesting Date”) so long as the New York Stock Exchange
shall be open for trading on such date (or on the preceding trading day if there
shall have been no trading on the Vesting Date).
3. Effects
of Certain Events:
(a) Upon the
death of the Participant or the termination of the Participant’s employment with
the Company by reason of Total Disability, an amount equal to (i) the Target
number of Performance Units granted hereby multiplied by (ii) a fraction, the
numerator of which is the number of complete calendar months between the Grant
Date and the date of death or such termination, and the denominator
of which is thirty-four, such product to be rounded up to the nearest whole
number (the “Prorated Amount”), shall immediately vest and be payable in cash to
the Participant within thirty (30) days after the Participant’s death or Date of
Termination (provided that if the payment is by reason of termination due to
Total Disability and the Participant is a Specified Employee on the Date of
Termination, payment shall not be made until six (6) months and one day after
the Participant’s Date of Termination).
Page 2 of
6
(b) Upon the
termination of Participant’s employment with the Company without Cause, an
amount equal to the Prorated Amount shall vest and be payable in cash and be
deliverable to the Participant on the date set forth in Section 5, subject to
adjustment for the achievement of the performance goals outlined herein and
as applied to all other Participants.
(c) Upon the
termination of Participant’s employment with the Company for any other reason,
the Award shall be forfeited and cancelled without consideration.
4. Conversion
of Performance Units: In its sole discretion, the Compensation
Committee of the Company’s Board of Directors (the “Committee”) may at any time
convert all or any portion of this Award into an award of Performance-vesting
Restricted Stock Units (“Performance RSUs”).
(a) If the
Committee determines to convert all or any portion of this Award, any unvested
portion of such Award shall be immediately cancelled and converted into the
right to receive an award of an equivalent number of Performance RSUs, the
performance measures, terms and conditions of which shall be determined by the
Committee in its sole discretion.
(b) If the
Committee determines to convert all or any portion of this Award, the provisions
of this Agreement shall no longer apply to the Award (or such portion that is
converted). The new award of Performance RSUs shall be governed by a
separate Performance RSU award agreement to be entered into by the Participant
and the Company at the time of conversion.
(c) The
Committee shall provide the Participant with prompt written notice of any
conversion of such Participant’s Award into an award of Performance
RSUs.
5. Settlement
of Performance Units: Subject to Sections 3(a) and 7 of this
Agreement, each vested Performance Unit shall be settled by a cash payment to
the Participant within fourteen (14) days after the Vesting Date in an amount
equal to the Fair Market Value of one share of Common Stock on the Vesting
Date,
6. Rights as
a Stockholder: The Participant shall have no rights as a
stockholder with respect to the Award.
7. Change in
Control; Dissolution:
(a) Notwithstanding
any other provision of this Agreement to the contrary, upon the occurrence of a
Change in Control, with respect to any Performance Units granted pursuant to
this Agreement that have not previously been forfeited or
converted:
(i) If
the unvested Award is assumed by the Participant’s new employer in connection
with the Change in Control, or a substitute award with the equivalent (or
greater) economic value and no less favorable vesting conditions is put in place
effective upon the Change in Control, the Award (or as applicable, the
substitute award) shall continue to be subject to the vesting and payment
conditions provided herein, provided that if the Participant’s employment is
terminated without Cause following the Change in Control, Performance Units in
an amount equal to the Target number of Performance Units granted hereby shall
immediately vest and the value of such Performance Units shall be paid in cash
within thirty (30) days after the Participant’s Date of Termination provided
that if the Participant is a Specified Employee on the Date of Termination,
delivery shall not be made until six (6) months and one day after the
Participant’s Date of Termination.
(ii) If
the Award is not assumed, or a substitute award is not made pursuant to Section
7(a)(i) above, then upon the Change of Control the value equal to the Target
number of Performance Units granted hereby shall immediately become vested and
paid in cash to the Participant within thirty (30) days after the
Change in Control occurs.
(b) Notwithstanding
any other provision of this Agreement to the contrary, in the event of a
corporate dissolution of the Company that is taxed under Section 331 of the
Internal Revenue Code of 1986, as amended, then in accordance with Treasury
Regulation Section 1.409A-3(j)(4)(ix)(A), this Agreement shall terminate and any
Performance Units granted pursuant to this Agreement that have not previously
been forfeited or converted shall immediately become vested and paid in cash to
the Participant in an amount equal to the value of the Target number
of Performance Units within thirty (30) days of such dissolution.
Page 3 of
6
8. Income
Taxes: The Company shall not deliver cash in respect of
any Performance Units unless and until the Participant has made arrangements
satisfactory to the Committee to satisfy applicable withholding tax
obligations. Unless otherwise permitted by the Committee, withholding
shall be effected by withholding cash payable in connection with the delivery of
Performance Units. The Participant acknowledges that the Company
shall have the right to deduct any taxes required to be withheld by law in
connection with the delivery of cash payable in respect of any vested
Performance Units from any amounts payable by it to the Participant (including,
without limitation, future cash wages).
9. Non-Transferability
of Award: The Participant represents and warrants that the
Performance Units are being acquired by the Participant solely for the
Participant’s own account for investment and not with a view to or for sale in
connection with any distribution thereof. The Participant further
understands, acknowledges and agrees that the Performance Units may not be sold,
assigned, transferred, pledged or otherwise directly or indirectly encumbered or
disposed of except to the extent expressly permitted hereby and at all times in
compliance with the U.S. Securities Act of 1933, as amended, and the rules and
regulations of the Securities and Exchange Commission thereunder, and in
compliance with applicable state securities or “blue sky” laws and non-U.S.
securities laws. Unless permitted by the Committee, the Performance
Units may not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated by the Participant other than by will or the laws of descent and
distribution. Notwithstanding the foregoing, the Participant may
designate a beneficiary on a form provided by the Company, with such beneficiary
to receive any cash payable hereunder following the Participant’s
death.
10. Other
Agreements: Subject to sections 10(a) and 10(b) below, this
Agreement constitutes the entire understanding between the Participant and the
Company regarding the Award, and any prior agreements, commitments or
negotiations concerning the Award are superseded.
(a) The
Participant acknowledges that as a condition to receipt of the grant made
hereunder, the Participant shall have delivered to the Company an executed copy
of this Agreement and an executed Long-Term Incentive Claw-Back Agreement if a
current version of such Long-Term Incentive Claw-Back Agreement is not already
on file as determined by the Committee in its sole discretion. For
purposes hereof, “Long-Term Incentive Claw-Back Agreement” means an agreement
between the Company and the Participant associated with the grant of long-term
incentives of the Company evidenced by the Award, which contains terms,
conditions and provisions regarding one or more of (i) competition by the
Participant with the Company; (ii) maintenance of confidentiality of the
Company’s and/or clients’ information; and (iii) such other matters deemed
necessary, desirable or appropriate by the Company for such an agreement in view
of the rights and benefits conveyed in connection with the Award.
(b) The
payment of cash provided by this Agreement is subject to the restrictions in
Section 17 below and is made in reliance on the provision in Treasury Regulation
Section 1.409A-3(b) permitting distribution on the earlier of the Vesting Date,
a separation from service or a Change in Control as provided under this
Agreement.
11. Not a
Contract for Employment; No Acquired Rights: Nothing in this
Agreement or any other instrument executed by the Participant shall confer upon
the Participant any right to continue in the Company’s employ or service, or any
right to future awards, nor limit in any way the Company’s right to terminate
the Participant’s employment or other service at any time for any
reason.
12. Severability: In
the event that any provision of this Agreement is declared to be illegal,
invalid or otherwise unenforceable by a court of competent jurisdiction, such
provision shall be reformed, if possible, to the extent necessary to render it
legal, valid and enforceable, or otherwise deleted, and the remainder of this
Agreement shall not be affected except to the extent necessary to reform or
delete such illegal, invalid or unenforceable provision.
13. Further
Assurances: Each party shall cooperate and take such action as
may be reasonably requested by either party hereto in order to carry out the
provisions and purpose of this Agreement.
14. Binding
Effect: The Award and this Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective permitted
heirs, beneficiaries, successors and assigns.
15. Electronic
Delivery: By executing this Agreement, the Participant hereby
consents to the delivery of any and all information (including, without
limitation, information required to be delivered to the Participant pursuant to
applicable securities laws), in whole or in part, regarding the Company and its
subsidiaries, and the Performance Units via the Company’s or plan
administrator’s web site or other electronic delivery.
16. Governing
Law: The Award and this Agreement shall be interpreted and
construed in accordance with the laws of New York and applicable federal
law.
17. Validity
of Agreement: This Agreement shall be valid, binding and
effective upon the Company on the Grant Date. However, the
Performance Units contained in this Agreement shall be forfeited by the
Participant and this Agreement shall have no force and effect if it is not duly
executed by the Participant on or before [Date].
Page 4 of
6
18. Compliance
with Section 409A of the Internal Revenue
Code. Notwithstanding any provision in this Agreement to the
contrary, this Agreement will be interpreted and applied so that the Agreement
does not fail to meet, and is operated in accordance with, the requirements of
Section 409A of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder. Further, in accordance with the restrictions
provided by Treasury Regulation Section 1.409A-3(j)(2), any subsequent
amendments to this Agreement or any other agreement, or the entering into or
termination of any other agreement, affecting the Performance Units provided by
this Agreement shall not modify the time or form of issuance of the Performance
Units set forth in this Agreement.
19. Definitions: The
following terms shall have the following meanings for purposes of this
Agreement:
(a) “Cause” means (i) the
Participant’s willful failure to perform the Participant’s duties to the Company
(other than as a result of total or partial incapacity due to physical or mental
illness) for a period of 30 days following written notice by the Company to
Participant of such failure, (ii) conviction of, or a plea of nolo contendere
to, (x) a felony under the laws of the United States or any state thereof or any
similar criminal act in a jurisdiction outside the United States or (y) a crime
involving moral turpitude, (iii) the Participant’s willful malfeasance or
willful misconduct which is demonstrably injurious to the Company or its
Affiliates, (iv) any act of fraud by the Participant, (v) any material violation
of the Company’s business conduct policy, (vi) any material violation of the
Company’s policies concerning harassment or discrimination, (vii) the
Participant’s conduct that causes material harm to the business reputation of
the Company or its Affiliates, or (viii) the Participant’s breach of any
confidentiality, intellectual property, non-competition or non-solicitation)
applicable to the Participant under Section 7 or any other agreement between the
Participant and the Company or an Affiliate.
(b) “Change in Control” shall
mean, in accordance with Treasury Regulation Section 1.409A-3(i)(5), any of the
following:
(i) any
one person, or more than one person acting as a group, acquires ownership of
stock of the Company that, together with stock held by such person or group,
constitutes more than 50% of the total voting power of the stock of the Company;
or
(ii) a
majority of members of the Board is replaced during any 12-month period by
directors whose appointment or election is not endorsed by a majority of the
members of the Board prior to the date of the appointment or election;
or
(iii) any
one person, or more than one person acting as a group, acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by
such person or persons) assets from the Company that have a total gross fair
market value equal to 50% or more of all of the assets of the Company
immediately prior to such acquisition or acquisitions.
(c) “Date of Termination” shall
mean in accordance with Treasury Regulation Section 1.409A-1(h)(1) and the
definition of “separation from service” in the Celanese Corporation Deferred
Compensation Plan, the date on which the Participant’s employment terminates
such that the Company anticipates no further services will be performed by the
Participant for the Company (or any services are reduced by 80% or more as
provided by Treasury Regulation Section 1.409A-1(h)(1)(ii)).
(d) “Effective Date” means
December 11, 2008.
(e) “Operating EBITDA” means a
measure used by the Company’s management to measure performance, and is defined
as operating profit from continuing operations, plus equity in net earnings from
affiliates, other income and depreciation and amortization, and further adjusted
for Other Charges and other adjustments as determined by the Company and as
approved by the Committee.
Page 5 of
6
(f) “Specified Employee” has the
meaning set forth in the Celanese Americas Supplemental Retirement Pension Plan
and the Company shall be considered a “Participating Company” for purposes of
such definition.
(g) “Person” means any person,
firm, partnership, joint venture, association, corporation or other business
organization, entity or enterprise whatsoever.
(h) “Total Disability” has
the same meaning as “Disability” in the Celanese Corporation Deferred
Compensation Plan.
(i) “Total Shareholder Return” or
“TSR” means the change in the
price of the Company’s Common Stock, including dividends (as if reinvested),
cumulatively over the period December 1, 2008 through September 30, 2011 (the
“TSR Performance Period”), as determined in good faith and in the sole
discretion of the Committee. Total Shareholder Return for the Company
and the Peer Group shall be calculated using the average of the last reported
sales price per share of voting common stock on the New York Stock Exchange
Composite Transactions (or such other comparable securities exchange or trading
market as the common stock of the Company or the applicable Peer Group company
shall then be traded) for the last twenty (20) trading days preceding
December 1, 2008, and for the last twenty (20) trading days preceding
October 1, 2011.
This
Performance Unit Award Agreement dated December 11, 2008 has been delivered to
the Participant pursuant to such action approved by the Committee on the Grant
Date and can be accepted only by the signature of the Participant and timely
delivery thereof to the Company in accordance with the terms of this
Agreement.
IN
WITNESS WHEREOF, this Award Agreement has been executed and delivered by the
parties hereto.
ACCEPTED AND
AGREED: PARTICIPANT
By:
Name:
Xxxxx X.
Xxxxxxx
Employee
ID: [Personnel Number]
Date:
Page 6 of
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APPENDIX
A
CALCULATION OF THE
PERFORMANCE-BASED VESTING
|
Name
of Participant:
|
Xxxxx
X. Xxxxxxx
|
||
|
Grant
Date:
|
December
11, 2008
|
||
|
Threshold(1)
|
Target
|
Maximum
|
|
|
Performance
RSUs subject to the Award:
|
100,000
|
200,000
|
450,000
|
(1) No
Performance Units will be earned if Operating EBITDA performance results
achieved are below Threshold.
Performance-Based
Vesting Calculation
The
percentage of Performance Units that may vest on October 14, 2011 is subject to
the achievement of specified levels of (i) the Company’s Operating EBITDA during
its 2009 and 2010 fiscal years and (ii) the Company’s Total Shareholder Return
as compared with peer companies during the TSR Performance Period, where the
potential performance-based vesting outcomes are summarized as
follows:
Table
1 – Potential Performance-Based Vesting Outcomes:
|
Relative
TSR
|
||||
|
Below
Threshold
|
Target
|
Stretch
|
||
|
Operating
EBITDA
|
Below
Threshold
|
0%
|
0%
|
0%
|
|
Threshold
|
25%
|
50%
|
75%
|
|
|
Target
|
50%
|
100%
|
150%
|
|
|
Stretch
|
75%
|
150%
|
225%
|
|
A-1
A. Calculating the Award Adjustment based on
the Operating EBITDA Results Achieved
The
following table outlines the respective measurement periods, weightings and
performance goals/ranges for the Operating EBITDA performance
measure.
Table
2 – Operating EBITDA Performance Goals and Payout Range:
|
Measurement
Period
|
Period
Weight
|
Operating
EBITDA
Performance
Goal / Range
|
Operating
EBITDA Performance Percentage Range (1)
|
||||
|
Threshold
|
Target
|
Stretch
|
Threshold
|
Target
|
Stretch
|
||
|
1/1/2009
to 12/31/2009
|
40%
|
20%
|
40%
|
60%
|
|||
|
1/1/2010
to 12/31/2010
|
40%
|
20%
|
40%
|
60%
|
|||
|
1/1/2009
to 12/31/2010
|
20%
|
10%
|
20%
|
30%
|
|||
|
100%
|
50%
|
100%
|
150%
|
||||
(1) No
Operating EBITDA performance percentage will be earned (0%) if the actual
performance results achieved are below threshold for each respective measurement
period.
The
Participant’s Performance Unit Target Award will be adjusted (up or down) based
on the Company’s absolute achievement of the Operating EBITDA performance goals
as follows:
|
1.
|
The
Operating EBITDA performance percentage for each measurement period shall
be calculated by straight-line interpolation for results achieved between
Threshold and Target, or for results achieved between Target and
Stretch;
|
|
2.
|
For
each measurement period, the result of step 1 (a percentage) shall be
multiplied by the Target number of Performance
Units;
|
|
3.
|
The
results of step 2 for each measurement period shall be added together to
determine the total number of Operating EBITDA adjusted Units (“Adjusted
Units”).
|
A-2
|
B.
|
Calculating
the Award
Adjustment based on the Relative TSR Results
Achieved
|
Relative
TSR performance will be calculated after the end of the TSR Performance
Period. The resulting calculation will increase or decrease the
number of Adjusted Units by a percentage between 50% and 150%.
Table
3 – TSR Performance Goals and Payout Range:
|
TSR
Performance Percentile
|
TSR
Payout Level
|
|
|
Threshold
|
20th
or below
|
50%
|
|
Target
|
50th
|
100%
|
|
Stretch
|
80th
or above
|
150%
|
The Participant’s Adjusted Units will
be further adjusted based on Relative TSR as follows:
|
1.
|
Calculate
Total Shareholder Return for each company in the Peer Group (as set forth
on Appendix B) for the TSR Performance Period and rank such companies from
lowest to highest as measured by
TSR.
|
|
2.
|
Determine
the Threshold, Target and Stretch Performance Levels for the Peer Group
(excluding the Company) using a rank-based methodology as
follows:
|
N = the
number of companies that remain in the Peer Group on September 30,
2011
Threshold Performance Level =
..2 (N+1)
Target Performance Level = .5
(N+1)
Stretch Performance Level =
..8 (N+1)
If any
Performance Level does not correspond exactly to a company in the Peer Group
ranking, then the company that corresponds most closely to the specific
performance level (whether higher or lower) shall represent such Performance
Xxxxx.
X-0
|
0.
|
Xxxxxxxxx
the Company’s rank against the Peer Group TSR performance
results:
|
|
a.
|
if the
Company’s TSR performance achieved is
between Threshold and
Target:
|
|
|
X%
= (100% – 50%) / (the number of companies ranked between Threshold
Performance Level and Target Performance Level including the
Company)
|
Add X% to
50% (the Threshold TSR Payout Level) for each position the Company is ranked
above the Threshold Performance Level.
|
b.
|
if the
Company’s TSR performance achieved is
between Target and Stretch:
|
|
|
X%
= (150% – 100%) / (the number of companies ranked between Target
Performance Level and Stretch Performance Level including the
Company)
|
Add X% to
100% (the Target TSR Payout Level) for each position the Company is ranked above
Target Performance Level.
|
4.
|
Multiply
the percentage resulting from step 3 above by the number of Adjusted Units
to calculate the number of Performance Units that shall vest (rounded to
the nearest whole unit) and become payable as
cash.
|
X-0
XXXXXXXX
X
PEER GROUP
COMPANIES
The peer
group was established by selecting all of the companies comprising the Dow Xxxxx
U.S. Chemicals Index (DJUSCH) as of December 1, 2008 (the “Peer
Group”). The companies in the Index on that date, not including
Celanese, were:
Table
1 – Peer Group Companies:
|
Company
|
Ticker
|
Company
|
Ticker
|
||
|
1.
|
X.
Xxxxxxxx Inc.
|
SHLM
|
19.
|
International
Flavors & Fragrances Inc.
|
IFF
|
|
2.
|
Air
Products & Chemicals Inc.
|
APD
|
20.
|
Lubrizol
Corp.
|
LZ
|
|
3.
|
Airgas
Inc.
|
ARG
|
21.
|
Minerals
Technologies Inc.
|
MTX
|
|
4.
|
Albemarle
Corp.
|
ALB
|
22.
|
Mosaic
Co.
|
MOS
|
|
5.
|
Ashland
Inc.
|
ASH
|
23.
|
Xxxx
Corp.
|
OLN
|
|
6.
|
Xxxxx
Xxxxxxxx Corp.
|
AVY
|
24.
|
OM
Group Inc.
|
OMG
|
|
7.
|
Cabot
Corp.
|
CBT
|
25.
|
PPG
Industries Inc.
|
PPG
|
|
8.
|
CF
Industries Holdings Inc.
|
CF
|
26.
|
Praxair
Inc.
|
PX
|
|
9.
|
Chemtura
Corp.
|
CEM
|
27.
|
Rockwood
Holdings Inc.
|
ROC
|
|
10.
|
Cytec
Industries Inc.
|
CYT
|
28.
|
Rohm
& Xxxx Co.
|
ROH
|
|
11.
|
Dow
Chemical Co.
|
DOW
|
29.
|
RPM
International Inc.
|
RPM
|
|
12.
|
X.
X. XxXxxx de Nemours & Co.
|
DD
|
30.
|
Sensient
Technologies Corp.
|
SXT
|
|
13.
|
Xxxxxxx
Chemical Co.
|
EMN
|
31.
|
Sigma-Xxxxxxx
Corp.
|
SIAL
|
|
14.
|
Ecolab
Inc.
|
ECL
|
32.
|
Terra
Industries Inc.
|
TRA
|
|
15.
|
Ferro
Corp.
|
FOE
|
33.
|
Tredegar
Corp.
|
TG
|
|
16.
|
FMC
Corp.
|
FMC
|
34.
|
Valspar
Corp.
|
VAL
|
|
17.
|
X.
X. Xxxxxx Co.
|
FUL
|
35.
|
X.
X. Xxxxx & Co.
|
GRA
|
|
18.
|
Huntsman
Corp.
|
HUN
|
36.
|
Zep
Inc.
|
ZEP
|
If one or
more members of the Peer Group cease to be a publicly traded entity during the
TSR Performance Period, then that company will be removed from the Peer
Group. No additional companies will be added to the Peer Group
(closed group) for purposes of this Award.
B-1
